Grameen Foundation and USAID Providing $3 Million for Peruvian Microfinance Institutions
Wednesday, September 21, 2011
Grameen Foundation and the U.S. Agency for International Development (USAID) today announced that they are jointly providing a $1.5 million credit guarantee to the Peruvian savings and credit cooperative Cooperativa de Ahorro y Credito (ABACO) to support approximately $3 million for local currency financing to two socially-focused Peruvian microfinance institutions (MFIs).
Peru has an established microfinance sector, with mature institutions having relatively easy access to international capital markets. However, there continues to be a great need for local currency financing, especially among smaller microfinance institutions, which traditionally have not been eligible for loans from local banks.
Through this credit guarantee with ABACO, Grameen and USAID are able to support multiple MFIs through one umbrella agreement. Grameen Foundation and USAID expect to facilitate additional local currency financing under this arrangement with ABACO, helping it to expand its client base to include smaller MFIs that focus on the rural poor. The organizations also plan to use this model in other countries.
“This unique global partnership with Grameen will enable us to make more microfinance loans available to borrowers around the world,” said USAID’s Administrator Rajiv Shah. “By unlocking local private capital to support underserved microentrepreneurs, this opportunity will help leverage our core development investments and deliver meaningful results for the people of Peru.”